Charter Scores Set-Top Waiver

The Federal Communications Commission has granted a condition-filled, two-year set-top waiver to Charter Communications partly on the belief that it could spur broader adoption of downloadable video security systems by other U.S. cable operators and lure more consumer electronics manufacturers to the platform.

The waiver clears the way for Charter to deploy dual-security set-top boxes that support the new downloadable security platform, which requires a “commodity” hardware chip, and an integrated version of Charter's legacy security system that will be used as the MSO rolls out the new technology. Charter argued that it would be egregiously expensive to create a dual-security box with a CableCARD and likewise delay its all-digital conversion.

The plan mimics the one Charter CEO Tom Rutledge championed as the chief operating officer of Cablevision Systems, which was granted a similar waiver in 2009. Cablevision’s system, like the one proposed by Charter, will use a downloadable security system based on the Cisco Systems “key ladder” that Cablevision is running on Samsung set-tops and is available on an open royalty-free basis for implementation by third-party manufacturers.

Charter’s request was opposed by the AllVid Tech Company Alliance, TiVo investor Samuel Biller, the Consumer Electronics Association and Public Knowledge, in part because they were skeptical that third-party manufacturers would make devices that are compatible with the downloadable system. They were also leery that the downloadable platform would be nationally portable.

The FCC concluded that it had “good cause” to grant the limited waiver because it “will increase the chance of an industry-wide standard developing” for downloadable security for set-tops while attracting support from CE companies.

“We believe Charter’s adoption of the same system will make it more likely that other operators considering moving to a downloadable security system will adopt the same established and tested technology, which will in turn make it more likely that third party manufacturers will develop retail devices given the expanded market,” the FCC noted.

But there are several conditions that Charter must meet, or face possible revocation of the waiver:

Charter must submit a declaration, signed by its CEO (Tom Rutledge) under penalty of perjury, attesting that Charter is engaged in good faith negotiations with a CE manufacture that intends to develop a set-top to be sold at retail in the U.S. that uses Charter’s downloadable security and can be used by Charter customers in all the MSO’s cable systems.

Charter must also support the CableCARD indefinitely, including self-installation, and in switched digital video deployments, among other requirements. As an incentive, Charter will no longer be required to provision new CableCARDs to customers when a third-party device compatible with the MSO’s downloadable security system is available for purchase at retail.

Charter must submit semi-annual reports (to coincide with the January and July submissions made by the NCTA on Charter’s behalf) to the FCC Media Bureau for the next four years. Those reports must provide status updates on several items, including Charter’s downloadable security deployment, its discussions with CE manufacturers, and the number of CableCARDs being deployed by Charter for use in retail devices like TiVo boxes.

Charter must offer the hardware, software, specs and codes to implement the downloadable security system on an open, royalty-free basis, and cooperate “in a timely manner” with any third-party manufacture seeking to develop devices that use the new security system.

The FCC also accepted conditions volunteered by Charter outlined in an April 4 filing that included a promise to expand the reach of its 100 Mbps high-speed Internet tier to an additional 200,000 homes within two years of getting the waiver, and to go-all digital in all markets within nine months after the two-year waiver expires.

"Charter Communications is pleased with the FCC’s decision to grant our waiver request," the company said in a statement released Thursday. "By granting the waiver, the FCC has helped expedite Charter’s ability to deliver a next-generation, all-digital network. The many consumer benefits of an all-digital network include better video services and higher internet speeds. As we convert to an all-digital footprint, we have committed to offering 100Mbps service to an additional 200,000 homes and will continue to support legacy boxes with separable security."